Previously the rules stated that imports below $1,000 were excluded from GST, however parliament passed legislation last month which means that all imports no matter the value will now be subject to GST.

The treatment of internet shopping has been an argumentative issue for a while with the retail sector lobbying hard to ensure that where a business is benefiting from sales to Australian consumers, the purchase is taxed in the same way as local retailers.

While the start date of the change will not come into effect until 1 July 2018, businesses that are importing goods into Australia will need to review their position to check whether supply chains are affected and determine which entity is actually liable for the GST. Australian businesses that purchase low value goods from overseas should also check to ensure that overseas suppliers are not imposing GST on supplies of these goods unnecessarily in this financial year.

The new rules are intended to apply to circumstances that are not captured by the existing GST importation rules because the goods are worth $1,000 or less. The rules are intended to only apply when goods are delivered to Australian consumers who are either not registered for GST in Australia or where the goods do not relate to an enterprise or business being carried on in Australia. If your business imports goods into Australia and is registered for GST, the tax should not apply to low value goods you import.

Where goods are purchased through electronic providers, such as Amazon, eBay or Alibaba, responsibility for collecting the GST will rest with the electronic provider as they manage the customer billing on behalf of the supplier. However, the Government understands that it will be difficult to force foreign companies to comply with the new rules leading to concerns about the costs of the administration required to enforce GST on low value goods.

For overseas suppliers, if the value of goods sold into Australia is greater than $75,000 per annum, the entity is required to register for GST. However simplified options are available for those that only export to Australia and have no need to claim tax credits in Australia.